Estate Planning and Digital Assets

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A few years ago I met a guy who works in a rather new and innovative niche of computer technology, as a Certified Hacking Forensic Investigator. That sounded like something out of an episode of CSI Miami until he explained that he provides services to families and heirs of people who die without leaving behind instructions and information about their digital assets.

That got me thinking about all the valuable information and data that is floating out there in digital cyberspace, behind password-protected firewalls and within carefully encrypted online vaults. People have PayPal accounts, online banking accounts, and stock and bond portfolios held by Internet brokerage firms. Their retirement savings plan may be completely managed by on online financial institution, or they could own a lucrative online business that accepts all of its customer payments electronically. Many people, in fact, have an entire galaxy of financial assets and conduct the majority of their business through web-based stores, portals, and digitized transactions.

What becomes of all of that when they suddenly and unexpectedly die? All you have to do is listen to the news to realize that it happens every day, to people of all ages. One minute they’re here, and the next moment they’re gone – along with all that confidential information related to their digital belongings. Will their survivors have to hire a Certified Hacking Forensic Investigator?

Cloud-Based Assets in Lost-and-Found

Sometimes privacy is a vital tool, but if your financial assets are shrouded in secrecy because you forgot to leave behind a paper trail, that could spell real problems for your survivors. One symptom of the disturbing phenomenon is that the value of unclaimed assets held by state treasuries is growing, and the more technological advances, the more those lost-and-found department coffers get filled with valuables that remain unspoken for and unknown.

Nest Eggs in Cyberspace

In 1998 the Pew Research Center reported that only 10 million Americans conducted online banking transactions. These days, however, the number of people performing online banking just by smart phone alone is approaching the tens of millions. More than 80 percent of Americans shop online and about 70 percent or more bank over the Internet. People not only have financial accounts, but they may have frequent flier miles and even real estate timeshares that will not show up when survivors or executors search file cabinets, wallets, and lock boxes. Without offline documentation, these valuables are virtually invisible and inaccessible. Then there are incidental digital possessions like music and photo archives – all stored on laptops, cell phones, and other devices.

How to Avoid Digital Drama

What can you do to ensure that your digital assets aren’t lost and your surviving loved ones don’t inherit a huge headache trying to track down your digital estate? Step one is to take an inventory. Then commit that laundry list of digital valuables to paper. Under each particular asset create a short, informative description and add your user name and password.

An excerpt from your list might look something like this:

eBay Seller Account: I have a side business on eBay that generates about $400 per month. My eBay user name is JLVend43X and my password is Merch2364TN.

IRA Account: I have an IRA account online with Acme Brokerage. When I filed my tax returns for this year the balance in that account was about $18,000. The user name is Janet459IRA and my password is JLRetires2030

Photos and Family Archives: I keep photo scrapbooks and information about our family on my laptop, which is password protected. The password to log in is 55023YEARBOOK.

Mark your calendar once or twice a year – for instance on your birthday or when you prepare your taxes –to update your list with any new digital items, passwords, or other pertinent information. Keep a copy of that list with your Last Will and Testament, which should be stored in a safe, secure place or held by your attorney.

One Final, Essential Safeguard

While we’re the on the subject, if you have not yet created your Last Will, do so ASAP – no matter how young and healthy you are. Should you die suddenly without one the state government may wind up with the majority of your assets. People often complain about paying taxes, but they still do not have a Will – so they are virtually guaranteeing that they will pay excessive taxes when they leave this world. Creating a simple, basic Last Will with the expert help of an attorney is not that expensive compared to the loss that your heirs will incur if you fail to make one. You can also write your own will if your estates aren’t very complex.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

*The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.

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